Companies like
This week’s agreements between Apple and Disney’s (DIS)
Time Warner Cable (TWC) and other pay-TV providers are offering incentives to media companies to deny Internet TV content that’s now exclusive to television, according to an article by Bloomberg’s Andy Fixmer and Alex Sherman on June 12. Those “incentives” include both higher pay to content companies that refuse to sell to online TV, as well as threats to drop programming of companies that don’t. Time Warner and an official at Charter Communications (CHTR) defended generally the practice of “protecting the ecosystem” of offline pay TV at a telecom conference last week.
Intel, in particular, has hit a wall in content negotiations, according to a blog post the following day by The Wall Street Journal’s Shalini Ramachandran and Amol Sharma. Intel’s TV product (they haven’t given it a real name yet) is supposed to launch some time this year and include live TV feeds – a selling point expected to convince even more cable customers to cancel those subscriptions. Cable companies, not surprisingly, are particularly reluctant to see live TV go to the Internet. Apple and Google have had plenty of other products to keep them growing in recent years. But Intel, a chip maker that was tragically slow to the last tech revolution (mobile), could really use a hit in Internet TV.
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Of course, Netflix, too, suffers when media companies hoard their content. But as the most massive streaming content holder now, any obstacles that prevent those grand competitors from catching up might be welcome. Netflix is much farther ahead in strategies to overcome this problem, which it does mainly by creating and obtaining exclusive content. In fact, its share price soared earlier this week after announcing a deal to put original content by DreamWorks Animation on its service. If DreamWorks produces even one show with characters as popular as its Shrek or Marty the Madagascar Zebra, Netflix should sell a lot more subscriptions to grateful parents.
The U.S. Justice Department is reportedly investigating whether cable companies are violating antitrust laws by limiting online competition. So it’s possible that the content producers will be forced to share eventually, whether or not they want to. But right now, their stinginess is doing Netflix a favor.
Dee Gill, a senior contributing editor at YCharts, is a former foreign correspondent for AP-Dow Jones News in London, where she covered the U.K. equities market and economic indicators. She has written for The New York Times, The Wall Street Journal, The Economist and Time magazine. She can be reached at editor@ycharts.com. You can also request a demonstration of YCharts Platinum.